Milner v. Bolger

Decision Date26 August 1982
Docket NumberNo. Civ. S-81-315 RAR.,Civ. S-81-315 RAR.
Citation546 F. Supp. 375
CourtU.S. District Court — Eastern District of California
PartiesBlanche MILNER, Plaintiff, v. William F. BOLGER, Postmaster General, Defendant.

Rolleen McIlwrath, Fass, McIlwrath & Yecies, Stockton, Cal., for plaintiff.

Larry B. Anderson, U.S. Postal Service, San Bruno, Cal., Yoshinori H.T. Himel, Asst. U.S. Atty., Sacramento, Cal., for defendant.


RAMIREZ, District Judge.

The motion of defendant to strike plaintiff's prayer for interest on any judgment she may hereinafter recover came on regularly for hearing before the Honorable Raul A. Ramirez on May 10, 1982. Defendant and moving party, WILLIAM F. BOLGER, was represented by Yoshinori H.T. Himel, Assistant United States Attorney, and Larry B. Anderson, Esq., of the United States Postal Service. Plaintiff and responding party, BLANCHE MILNER, was represented by Rolleen McIlwrath, Esq. Having considered the memoranda of points and authorities and having considered the respective arguments of counsel, the Court herein renders the following memorandum decision:


Plaintiff commenced this action on May 28, 1981, alleging, inter alia, that defendant had discriminated against her on the basis of her gender and her physical handicap in the terms and conditions of her employment as a United States Postal Service employee, in violation of 42 U.S.C. § 2000e-16. In an amended complaint, filed October 21, 1981, plaintiff requested an order requiring defendant to make her whole "by appropriate back pay and otherwise." Specifically, plaintiff prayed, "The amount paid in restitution should include interest, and an upward adjustment to compensate for the loss of real purchasing power due to inflation between the dates of loss and of award." It is this portion of the prayer that the motion to dismiss addresses.

As a general rule neither pre-judgment nor post-judgment interest is recoverable from the United States, United States v. Alcea Band of Tillamooks, 341 U.S. 48, 71 S.Ct. 552, 95 L.Ed. 738 (1951). This general rule has been applied in Title VII actions brought against the military departments as well as the executive agencies of the United States, Saunders v. Claytor, 629 F.2d 596 (9th Cir. 1980) (Department of the Navy), Blake v. Califano, 626 F.2d 891 (D.C. Cir. 1980) (Department of Health and Human Services), deWeever v. United States, 618 F.2d 685 (10th Cir. 1980) (Veterans' Administration),1Fischer v. Adams, 572 F.2d 406 (1st Cir. 1978) (Department of Transportation), Richerson v. Jones, 551 F.2d 918 (3rd Cir. 1977) (Department of the Navy). The question presented by this case is whether the United States Postal Service may claim the benefit of the general rule in a Title VII action in which it is the named defendant.


The primary obstacle to the invocation of sovereign immunity by the Postal Service is the "sue and be sued" clause of 39 U.S.C. § 401(1):

The Postal Service shall have the following general powers:
(1) to sue and be sued in its official name;

It has long been established that the inclusion of a "sue and be sued" clause in the Congressional enabling legislation constitutes a waiver of sovereign immunity, Reconstruction Finance Corp. v. J.G. Menihan Corp., 312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595 (1941), Federal Housing Administration v. Burr, 309 U.S. 242, 60 S.Ct. 488, 84 L.Ed. 724 (1940), Standard Oil Co. v. United States, 267 U.S. 76, 45 S.Ct. 211, 69 L.Ed. 519 (1925), see Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939). In Burr, the Supreme Court held:

We start from the premise that such waivers by Congress of governmental immunity in case of such federal instrumentalities should be liberally construed. This policy is in line with the current disfavor of the doctrine of governmental immunity from suit, as evidenced by the increasing tendency of Congress to waive the immunity where federal governmental corporations are concerned. Keifer & Keifer v. Reconstruction Finance Corporation, supra. Hence, when Congress establishes such an agency, authorizes it to engage in commercial and business transactions with the public, and permits it to "sue and be sued", it cannot be lightly assumed that restrictions on that authority are to be applied. Rather if the general authority to "sue and be sued" is to be delimited by implied exceptions, it must be clearly shown that certain types of suits are not consistent with the statutory or constitutional scheme, that an implied restriction of the general authority is necessary to avoid grave interference with the performance of a governmental function, or that for other reasons it was plainly the purpose of Congress to use the "sue and be sued" clause in a narrow sense. In the absence of such a showing, it must be presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to "sue and be sued", that agency is not less amenable to judicial process than a private enterprise under like circumstances would be. (Emphasis added)

309 U.S. at 245, 60 S.Ct. at 490. It is therefore incumbent upon this Court to determine (1) if the award of interest on Title VII judgments would be inconsistent with the statutory scheme for the operation of the Postal Service, (2) would gravely impair the performance of a governmental function, (3) would do violence to a plain Congressional intent to limit the waiver to a narrow set of circumstances.

The statutory scheme for the operation of the Postal Service is codified in Title 39 of the United States Code. In enacting the Postal Reorganization Act of 1970, Pub. L. No. 91-375, 84 Stat. 719 (1970), Congress espoused a thoughtful revision of the Postal Service, see generally, H.R. Rep. No. 91-1104, 91st Cong., 2d Sess., reprinted in 1970 U.S. Code, Cong. & Admin. News 3649. On the one hand, Congress clearly wanted the Postal Service to operate in a sound, businesslike manner. On the other hand, Congress wanted the Postal Service to operate as a public service. In order to harmonize both of these sometimes competing goals, Congress attempted to create a business entity, but imposed some limitations on business operations to accommodate public service needs.

In order to facilitate the sound, businesslike operations mandated by Congress, the Postal Service was given a considerable degree of independence:2 for instance, the Postmaster General was removed from the President's cabinet and his appointment and supervision were vested in a Board of Governors, 39 U.S.C. §§ 202(c), 203; in addition, the appointment of the Board of Governors, as well as the restrictions upon and requirements for the appointment of the Governors, was amended so as to insulate the Governors, and the Postmaster General, from the temptation to manage the Postal Service in a manner which would serve various particular political interests, see, H.R. Rep. No. 91-1104, 91st Cong., 2d Sess., reprinted in 1970 U.S. Code, Cong. & Admin. News 3649, 3660.

In the field of labor-management relations, Congress patterned the Postal Service very closely after private enterprise. With the enactment of the Postal Reorganization Act of 1970, Congress gave to Postal Service employees the statutory right to organize themselves into bargaining units and to bargain with management regarding wages, hours, and working conditions.3 The supervision of the organizing process was assigned, not to the Federal Labor Relations Authority, 5 U.S.C. § 7101, et seq., but to the National Labor Relations Board, 39 U.S.C. § 1202, et seq. The similarity of the labor-management relationship in the Postal Service to the labor-management relationships of private industry was quite deliberate:

Generally speaking, H.R. 17070 would bring postal labor relations within the same structure that exists for nationwide enterprises in the private sector. Rank and file postal employees would, for the first time, have a statutory right to organize collectively and to bargain collectively with management on all those matters — including wages and hours — which their neighbors in private industry have long been able to bargain for.

H.R. Rep. No. 91-1104, 91st Cong., 2d Sess., reprinted in 1970 U.S. Code, Cong. & Admin. News at 3662.

In its fiscal affairs, the Postal Service appears to enjoy a greater degree of autonomy than that enjoyed by the executive agencies. The capital of the Postal Service is treated as something quite distinct from the capital of the United States, 39 U.S.C. § 2002. The day-to-day financial operations are funded by the Postal Service Fund, over which the Postal Service has exclusive control, 39 U.S.C. § 2003. The Postal Service has the right to sell its own obligations without the prior consent of the United States Treasury, 39 U.S.C. §§ 2005, 2006. Finally, the Postal Service has been granted the authority to procure the property and services it needs to conduct its operations independently of the executive agencies, 39 U.S.C. § 410(a), 39 C.F.R., Part 601.

In sum, both the text of the statute and the legislative history make plain the Congressional intent to fashion an entity that would function as much like a private business as possible. At the same time, the text of the statute and the legislative history make plain a keen Congressional awareness of the extent to which the Postal Service had to be cognizant of and governed by its public service mission:

The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services

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